Globalization of Poverty and the World Order

Globalization of Poverty and The world order.
Michel Chossudovsky

9/11 1973 Augusto Pinochet coup killed Salvador Allende-bread went up from 11 to 40 escudos, economic shock treatment designed by Chicago boys, disciples of Milton Friedman.
Wages frozen, in less than a year bread cost 36 times, 85% of the population reduced to below poverty level. It was a well organized economic repression.
1976 Argentina coup carbon copy of Chile coup.
Precursor of IMF structural adjustment programs
Since 1980 debt crisis same IMF formula in 150 countries.
New world order based on poverty and economic dislocation taking shape.
In Latin America most military regimes replaced by democracy tasked with hocking national economy under WB privatization.
7/28/1990 Alberto Fujimora president shock therapy, fuel 31 times, bread 12 times in a day, these reforms did worse under demo than under the military in Chile and Argentina.
1980 Rwanda had self sufficiency in food, destroyed by IMF, by opening up to US and Europe food surplus.
India, BD, Vietnam,, Kenya, Nigeria, Morocco and Philippines same pattern.1992 vast areas of USSR driven into abyssimal poverty.
1995 WTO entrenched rights to banks and MNCs. Public debt increased vastly, state institutions collapsed, private wealth massively increased, national sovereignty and citizen rights curbed.
After 13 years of economic sanctions, invasion of Iraq 2003, destroyed infra structure, killed over a million in an American led war with a huge military machine pushing corporate global agenda. Iraq 11% of world’s oil, (5 times that of US), Mid East 10, Caspian 70%.
Iraqi external debt used as instrument of economic plunder.
9/11 used to legitimize global free market.

New world order-Introduction.

Post cold war vast impoverishment of large section of world population, reversed the gains of post WW II desalinization, destroyed natural environment, promoted racism, ethnic strife and social apartheid, curbed HR and women’s rights.
Former USSR decline since 1992 worse than WW II, had full employment in 1970s, descended to hyperinflation from stable prices, no jobs, health care gone, Cholera and TB rife, conditions replicated through East Europe.
1997 East Asian crisis predatory speculators changed Asian tigers (Indonesia, Thailand and South Korea) into goats.
SK after IMF reforms 200 companies, 4000 workers thrown out (4) Indonesia riots, wages fell in sweat shops from $40.00 a month to 20

The West
Thatcher-Reagan welfare state gradually disintegrated, wages down, state out of welfare, done with out IMF role. Large public debt opportunity to for finance to dominate the state.
An entire generation no jobs (8&9), bust unions, put young against old, cut company health insurance.
Third worldization since 1980s, workers pushed into minimum wage jobs (10) promoting division in classes and ethnic groups.
Mergers, downsizing and closure, all labor affected, hit middle class most.
Free market has internationalized crime. Syndicates buying under privatization. UN report Transnational criminal organizations own assets $ 1 trillion = to total of low income countries with 3 billion population (11). Organized crime outperforms fortune 500 companies (12). (Daniel Brant Nambase News line OH.
IMF/WB/WTO created an enabling environment for global banks and corporations, not free market, bur intervention. IMF/WB/WTO work on behalf of economic/financial interests, backed by global and MNCs, regulates LDC’s economy and consult with international business bodies like International Chamber of Commerce, Institution of International finance, Trilateral Commission and Council on foreign Relations.
Techno/Science advancement not allowed to reduce poverty by downsizing, restrictions and outsourcing to cheap labor, wages down every where, LDCs as well as DCs. Capital migrates in search of cheap labor. Unemployment affects 1 billion, 1/3 of work force (ILO 14).
“Efficient” allocation of resources causes closure of industries, bankruptcy and unemployment of skilled workers, large unused industrial capacity and millions of jobless-not exactly efficient.
Stagnation in supply of necessities, investment in luxury goods, profit sought in speculation leads to disruption of financial markets. Number of billionaires in the US, 13 in 1982, 149 in 1996, 300 in 2000. WAL-MART family worth 85 billion (BD 33.4 billion). Speculation makes more millionaires (17) which go off shore accounts. Merrill Lynch estimated off shore at 3 trillion of private individuals (18). IMF individual plus corporations 5.5 trillion (19). Third world elite in Swiss banks 600 billion(20).
Reduction in employees and wages lowers demand but increased production results in excessive products, leads to bankruptcy/liquidation of surplus enterprises, entire regions affected (US WEST) lowers income of direct producers.
In LDCs industries for local markets have to close down as arranged by WB/IMF orders. Currency devaluation, open market and imports and dumping. Sub-Saharan Africa garment industry wiped out by US imports at $ 80.00 a ton(21). Stagnation in former soviet and LDCs MNC growth and shares unprecedented via displacement of local/indigenous trade/industry. IMF/WB regulate labor cost for corporate capital, G7 support mergers in contempt of competition, liberal philosophy.
Small and medium enterprises destroyed, taking over local business through franchising, grabbing a large share of locally generated income.
Europe Maastricht treaty financial interest overwhelm states, monopolies promoted. Global economics integration leads to curbs on local capital (22) and social strife.
War and globalization
Macro economic and trade reforms and WTO/WB/IMF peacefully recolonize via manipulation of markets.
Countries that refuse to open up WTO/WB/IMF collaborate with NATO in peace keeping (neo-liberalism imposed on Iraq). Direct war destroys what is left after deregulation. Satrapies installed in protectorates. Missile diplomacy in stead of the gun boat one(1844 Cushing Mission to China “the refusal to grant American demands…an invitation to war”.
Free market ideology introduces a brutal form of state intervention on behalf of banks and MNCs in WTO entrenched right of banks and MNCs.
All political parties subscribe to the concept that free markets will lead to universal prosperity.
The links between politicians and fiancé houses must be exposed and the economic system democratized.
Military/security apparatus supports the market system. Pentagon, NATO all security pacts beholden to Wall Street, IMF/WB/WTO, leading to the new world order.
The global media fabricates the news and distorts it. The resultant false consciousness precludes collective understanding of the economic system.
The struggle against the system has to be broad based and global.
Chap 1 The Globalization of poverty.
Since 1980, macro stabilization and structural adjustment of IMF and WB as a condition of loans and its roll over have impoverished dozens of nations, destabilized and ruined economies.
Purchasing power collapsed, famines, loss of health care and schools and resurgence of epidemics TB, malaria and cholera has resulted.
Post cold war restructuring used to undermine former soviet and East European countries. Though less harsh when applied by DCs to their own people, the agenda is the same, deprive people of jobs, health, welfare and education. Malnutrition hitting the poor and rich countries, 30 million in the US deemed chronically hungry (1) and women’s rights pulverized.
Concentration of Wealth
A very few have become enormously rich at the cost of the poor. The new world order promotes social apartheid, racism, religious/ethnic conflict and ravages the environment, wars between nations and regression of women’s rights.
IMF prescribes the same medicine, austerity, devaluation, trade liberalization, privatization to all 150 debt ridden countries. They forgo/lose control over monetary policy, institutions undone and a parallel government bypassing the legitimate one imposed by international financial institutions. (IFCs) non-conformists are black listed. They require strengthening of security and intelligence services with collusion of indigenous elite.
Multi party. elections are added to the advice, but the resultant dispensation as servile as dictatorships or monarchies.
LDCs suffer from social desperation, and protests are brutally repressed.
1989 Caraccas Carlos Andres Parez while denouncing IMF demands sends the military to kill in slums. Tunis 1984 bread riots suppressed brutally. 1989 Nigeria armed forces closed 6 universities. Morocco 1990 general strike against IMF reforms. Mexico Zapatista Liberation army insurrection. 1993 Russian Federation the parliament stormed. 1/2000 adoption of US dollar as currency, mass protests in Ecuador forced the president to resign. 4/2000 Bolivia massive protest against privatization of water.
Structural adjustment is economic genocide via manipulation of market prices, affect livelihood of 4 billion, makes national economies subservient to G7, this is market colonialism, worse than direct colonization and slavery.
Nations denied the possibility of developing economy, are transformed into reserves of cheap labor and natural resources and depress commodity prices.
There is an unequal structure of trade, production and credit. World population is 6.5 billion, 5.5 billion live in poor countries. 1 billion control 80% of world income, 60% of the population in low income countries receives 6% of world income, less than GDP of France and its colonies. 650 million in sub-Saharan countries GDP less than ½ of Texas.
In 1980 Nigeria minimum wage declined by 85%. Vietnam wages less than US $ 10.00 a month. Peru after IMF/WB therapy minimum wage fell 90% from 1970 level.
Dollarization.
Domestic prices of food staples are brought to world market level through liberalization, deregulation, while wages remain much lower in LDCs and superimposed on wide disparity between high and low income groups which are consequently widened.
IMF reformed East Europe and former Soviet countries to third world level.
Global institutions WTO 1995, triangular division of authority WB/IMF/WTO. With stricter surveillance Uruguay round at Marrakesh 1994. enforcement of IMD/Wb dictat-trade liberalization, privatization and FDI entrenched. In WTO articles, enforceable under international law, unlike previous ad hoc loans.
Entrenched rights of banks/IMF with derogation of the ability of nations to regulate their economies. WTO hands over extensive powers to MNCs to over rule nations.
1994 WTO agreement negotiated behind closed doors by bureaucrats, heads of government not advised of the statutes , membership entails acceptance of rules with out exception.(5). The 550 page agreement plus its numerous appendices rubber stamped by parliaments and all including dispute settlement process entrenched in international law.
WTO is a totalitarian inter government agency installed in Geneva, empowered under international law to police economic and social policies of countries. It over rides ILO, UN conference on Trade and Development and universal declaration of HR, provides legitimacy to intellectual piracy by bio-tech patents,-plants, animals, bacteria and genetic material under TRIPS
General Agreement on Trade and Services (GATS) legitimizes speculation of predators against LDCs.

Chap 2 Global Falsehoods

G7, IMF, WB, WTO, IFI deny increasing level of poverty. Public opinion manipulated by captive and owned media. They have bought and enslaved academia and research. Main stream economists produce theory with out facts and facts with out theory. No dissent or discussion allowed. Third world intellectuals suborned.
Neolib dogma creates its own paradigm in sustainable development, poverty alleviation, distorting policies on poverty and environmental rights. Manipulating figures on Poverty
The illusion that free market is conducive to long term prosperity is based on manipulation of data. WB estimate 18% third world extremely poor, 33% poor. Upper poverty limit fixed at $ 1.00 a day. Annual per capita $ 370.00 (2). Above $ 1.00 not poor. Per WB only 19% in Latin America and Caribbean poor. Compare it to US with annual per capita of over $23,000.00. One in seven Americans defined as poor by the census bureau. Biased assessment ignores conditions on the ground.(6) With liberalization, cost of basic food reaching world market level, one dollar is ridiculous, even with 5 they will remain poverty stricken.
Forecasts of poverty based on assumed rate of growth and forecast in china lowering from 20% in 1985 to 2.9 2000 and in India from (80% in official data) 55% in 1985 to 25% in 2000.
UN figures echo WB lies. UN development program (UNDP) Human development group”…reducing poverty 20 CCE…unprecedented…” (7), devised a Human Poverty Index (HPI), short life span, lack of basic education (8) and lack of access to…resources. The estimates of poverty totally unreal and more distorted than those of WB-only 10.9% poor in Mexico.

Double Standards
$ one a day applies to LDCs. Poverty in West ignored where based on spending required for food, shelter, health and education…poverty threshold in US in 1996 for a family of 4 was $ 16,036, $ 11.00 per capita spending required for food, shelter, health and education…poverty threshold in US in 1996 for a family of 4 was $ 16,036, $ 11.00 per capita day.. In the US 13.7 % of population (19.6% in inner metropolitan cities) below poverty (10). UNDP or WB don’t compare LDCs and DCs as it would be embarrassing. In Canada 17.4% below poverty line compared to 10.9% in Mexico and 4.1% in Trinidad and Tobago per UNDP (11).
In many Latin American countries 60% population does not meet minimum calorie and protein requirement. In Peru, after IMF 83% did not. It is worse in South Asia and sub-Saharan Africa.
UNDP claimed fall of child mortality by i/3-1/2 in sub-Saharan Africa where poverty has gone up and health services have failed. Closing health clinics which compiled data left mortality unreported.
The concealment by WB and UNDP is deliberate., meant to vindicate free market and Washington consensus.
Policy of conditionalities:
Countries had debt. Bretton wood institutions gave them loans with conditionalities which favored the interest of creditors.
Since 1980 debt burden of LDC increased, was 62 billion in 1970s, 481 billion in 1980, 2 trillion in 1998.
Tribute to the Rich”
With commodity prices tumbling in 198, larger share of export earning given to debt servicing- LDC became net exporter of capital., debt servicing larger than inflow of loan and aid and foreign investment.(1)
Policy Based Lending:
Symbiotic relation between debt management. and macro-economics reform Debt management consists of making sure that debtor nations abide by obligations. Through financial skullduggery, principal is kept intact, only interest is paid, new money is lent when the country is not…the verge of bankruptcy to avoid default of conditionality, structural adjustment reform, if conditionalities continue to be accepted. Debtors are thus kept from adopting independent economic policy. Countries which do not accept conditionalities have problems with rescheduling and obtaining new funds as well. As well as short term credit. These loan agreements are not related to an investment program as conventional loans.(2).
The loans did not help the economy, diverted away to import consumer goods from rich countries(3).. Only the loan burden grew.

Enlarging Debt:
Loan is fictitious money, invariably less than debt service. It is used for commodity imports, while export earning directed to debt service. (example-country owes 10 billion, interest 1 billion, new loan ½ billion, net creditor gain ½ billion)
Prior to loan:
Substantial “reform” evidence of commitment to reform, a letter of intent sent to IMF- in the light of IMF guidelines and technical advice given ahead of loan given to countries which are not on track for reform (Brazil 1990-1994)., former Soviet Union block countries and Vietnam.
IMF has to be satisfied before formal negotiations. Once loan granted policy monitored on quarterly basis, loan given in installments with held if reforms not on track and if interest not paid regularly. Loan seeking country obliged to offer policy framework paper written under supervision of IMF and WB. IMF involved in exchange rate and budget deficit, WB in actual reform process. IMF reviews on annual basis. WB reform heath, education, industry, agriculture, transport, ecology, privatization of state enterprises, and public investment through public expenditure review. IMF standby, contingency, extended funds, structural adjustment, emergency lending.
WB structural adjustment loan, sector adjustment loan.
Structural adjustment-short term loan, devaluation, price liberalization and budget austerity, economic stabilization, budget deficit, balance of payments (4).
Destroy currency, devalue, eliminate exchange controls
Exchange rate affects payment to direct producers and real wages. IMF always wants devaluation, immediate large devaluation causes price hikes and lowers real wages and labor cost and facilitates payment of debt service from state revenues.
Devaluation social consequences:
Price of food, drugs, public services, fuel up overnight, inflation and dollarization of domestic price. IMF forces governments to adopt anti-inflation program leading to contraction of demand, dismissal of public employees, drastic cuts in welfare and deindexation of wages. 1994 sub-Saharan Africa real wages and government expenses fell 50% redirecting revenues to debt service.
In some instances devaluation helped large agrarian export market in short term in the form of low wages to workers.
Dollarization leads to abrupt price hikes. Devaluation triggers inflation, tight restrictions placed on money supply, only after price hikes leads to further cuts in wages, jobs and welfare. Deindexation of wages from rise of cost of living leads to yet lower wages.

Control of Central Banks
IMF demands central bank independence from government to obviate inflationary bias of government (5), in effect taking over control of the bank which can not fund government expenditure through money creation, making country increasingly dependent upon international finance. Central bank no longer answerable to parliament (6), allegiance only to IFIs.
Destabilize National Finance
Dismiss employees, cut welfare, release more funds for debt service, conduct public expenditure review (PER) by WB, withdrawal of state from health, education.
Budget Deficit
5% of GDP first step, then to 3.5%, then to 1.5% leads to collapse of state programs and funds for debt service.
Collapse of public investment, budget target plus devaluation.
State not allowed to mobilize resources for public infra-structure, roads, hospitals, it is all in the hands of creditors under public investment program under WB auspices. All projects require international bidding contracts, large amounts skimmed off into consulting and management. Locals excluded though cheap labor used.
Loans are soft and long term, actual cost high due to consulting/management, external debt increases, domestic sources demobilized.
Price liberalization means all subsidies and price controls removed, deregulate domestic grain prices, liberalize food imports, combined with devaluation, prices skyrocket.
Petrol and Public Utilities Prices:
Regulated under WB supervision, hike often several hundred %, backlashes on cost of domestic industry and agriculture produces large scale bankruptcy.
Price hike and commodity dumping takes away domestic market from own producers.
Sub-Saharan Africa high cost of transport keeps farms from selling in their own cities in competition with dumping from Europe/North America-all this compares well with the internal transit duty imposed by East India Co in late 18th CCE.
Now structural reforms come in.
Trade Liberalization:
IFI tariff has anti export bias, discourages export economy, favors domestic market and misallocation of resources, little evidence that lowering tariff facilitated resources to exports. Eliminate import quotas, lower tariff leads to lower custom duty, less for public finances, prevent rationing of scarce foreign exchange for essentials. Domestic industry not strong enough to compete, collapses without competition. Luxury goods imported. Tax burden of the rich reduced, consumer frenzy based on debt increased external debt.
Divest-Privatize state enterprises
Take over assets of debtor countries debt service (like old time usurer Shylock immortalized by Shakespeare). Most profitable ones taken over in exchange of debt at low cost, money deposited in US treasury. Price of remaining assets tumbles. If ownership of strategic sector oil, gas, tele-com enshrined in constitution, that is changed.(Brazil).
Tax Reform
Burden falls on lower and middle class. Register small farms and informal sector , set it up for tax, joint and foreign sector tax holiday.
Land tenure and privatization of agriculture.
Legislation often (of ownership) under WB technical support, encourage larger farms, forfeiture of small farms and landless seasonal workers produced, often restoration of rights of landlord class, proceeds of land sales channeled to creditors.
Bank Regulation:
Central banks lose control over monetary policy, it is determined by free market. Concessional credit to agricultural industry removed, leads to hike in interest rates and high price and dollarization, influx of hot money, no credit to economy at reasonable rates-collapse of credit.
State development bank and commercial banks deregulated. Uruguay round agreement signed 1994, foreign commercial banks allowed free entry into domestic business. Thrust of the move, divest state banks under the supervision of IFI take over by foreigners to facilitate debt collection and displace domestic banks.
Capital movement free through electronic transfer, foreign firms take out profits in foreign exchange.

Recycle dirty money:
It can be easily repatriated by third world elite and criminals ( in off shore banks since 1960s), leads to rapid growth of illegal trade, promotes money laundering and also redirected towards external debt?
Poverty alleviation
Sustainable poverty reduction since 1980s predicted on slashing welfare, and redirect on a token basis to the poor. Social emergency Funds (SEF) social engineering manages poverty with the aim of minimizing social unrest at minimal cost to creditors, progress combined with cost recovery +privatization of health and education. SEF sanctions withdrawal of state from social sectors to NGOs funded by MNCs.
Good Governance:
Nature of economic reforms prevents genuine democratization.
Structural Adjustment, consequences of:
IMF measures lead to further indebtedness:
-New loans given to pay for old ones, only add to old loans.
-Trade liberalization makes balance of payments worse by replacing domestic production with imports.
-With Uruguay round completed a much larger portion of import bill consists of services and TRIPPS payment with out increase in quantity of imports.
-Structural adjustment (SA) significant shift to areas of imports.
IMF/WB dismantle social sectors, destroy the possibility of endogenous development controlled by national policy makers, reverse post colonial progress.
WB/IMF motto, ”short term pain for long term gain” and that situation bad, but could have been much worse, if structural adjustment not adopted (a very sick patient was taken to a village traditional physician. The doctor gave him a laxative. The man got worse. The doctor explained that foul material was coming out. He gave still more of the same medicine. The patient died. The relatives protested. The physician said, “if after so much foul material was taken out he died, imagine what would have happened if the material had stayed in”.
Social impact of SA well documented (9). Schools close, teachers laid of, health care deteriorates, registration and use fee imposed, partial privatization of essential government services.(10).
Freeze the number of graduates of teachers training colleges and increase pupil per teacher, worse cut eliminate teacher’s salary, give them loan to set up private schools.
Health Sector:
Subsidies create market distortion and WB $ 8.00 per person/year sufficient.(11) user fee from the destitute and replaced medical auxiliary government paid with illiterate volunteers.
Health care units become a source of infection. funds allocated for supplies of syringes, sterilizers further short cut by raise in rates of electricity, water, fuel-HIV incidence rises (12).
Communicable diseases:
Cholera, Yellow fever and malaria previously under control in sub-Saharan Africa and Malaria and Dengue Fever in Latin America have resurged since 1980s, thanks to IMF/WB contraction of public expenditure.

Women’s rights Chap 4
WB through its “Women In Development” (WID) dictates on gender policy (1). Women’s rights are evaluated on “opportunity Cost” and efficiency and monetary value attached to gender equality.
WB contends that free market will empower women, claims that Structural Adjustment Program (SAP) (2) favors women in economic market, but does acknowledge that cuts in social spending might hurt women more.
WB determines concept, methodology and data base on gender issues. Donors control institutions including women affairs ministries and bureaus. It is the main source of funding and women’s groups are beholden to them. Agenda is to impose free market perspective and defang female movements.
The same process, devaluation, austerity, user fee, trade liberalization,, cancellation/suspension of minimum wage-in short derogation of female rights applies to female empowerment under IMF/WB conditionalities.
Derogation of Education rights
Government scholarship/subsidies subject to laying off teachers(3).
User fee for health also deprives of health care.
Female placed in separate social category from men. Women’s relations with in the household determine female social status.
The hidden agenda is creating division and demobilizing female movement.

Cheap Labor Economy. Chap 5
Reshaping national economies of LDCs and their role in the new economic order promotes global poverty. So called reform applied world wide lowers wages world wide. Global economy feeds on cheap labor.
Industry is relocated to cheap labor country, launched in 1960s and 1970 by labor intensive manufacturing to HK, SK, Taiwan, Singapore sprouted all over in 1980s to South East Asia, Far East, China, Brazil, Mexico and East Europe affects a large range, auto, aircraft, ships, arms, toys, clothes, computer-everything. Based on destruction of domestic manufacturing (import substitution). WTO 1995 Free Trade Zones encompass entire territories of most LDCs.
Restructuring weakens the state, national enterprises, bankruptcies and labor cost goes down. It endorses world wide cheap labor export economy. Poor people work for rich consumers.
Consumer demand limited to 15% of world population overwhelmingly concentrated in rich countries.
Export Promotion:
Export or die. No import substitution or internal market. LDCs all over supply the self same Western countries. Over supply causes cuts in prices. LDCs compete with each other in beggaring themselves. Commodity prices are simultaneously lowered, with no money to pay the external debt which piles higher up. Success in exports leads to higher debt.
Poverty in LDCs reduces demand of products of rich countries, lowering wages there too.
Simultaneous application of export promotion leads to over supply, falling of commodity prices, export goes up, income goes less, tribute to rich countries rises.
SAP causes decomposition of national economies.. if labor unrest occurs, MNCs can switch production to cheap labor sources.
National wage level depends upon other competing cheap labor sources.
World unemployment promotes capital accumulation. Rural poverty in turn promotes lower urban wages.
Employee wages add 40% to manufacturing cost, in LDCs it is only 15%.
Plant closure in DCs follows relocation. Initially it was only labor intensive light industry, now all over all industry, and enormous number of lay offs. NAFTA extended the process to all Mexico, Japanese moving to Thialand/Philipines to wages $3-4 a day (2), Germany to Poland, Hungary, Czech and Slovak( $US 120.00/month) to old Lebensraum (US and Germany labor $28.00 hour). Consumer markets collapse as a result of unemployment in DCs,
World trade down, lowers consumer spending, due to deregulation, deindexing, part time, early retirement and “voluntary” wage cuts. Attrition burdens young people with social support of older ones.
Relocation with in Trading Blocks:
West Europe and N. America developing cheap labor hunter-lands-Poland and Mexico.
Maastricht treaty of European Union allows free labor movement, but not NAFTA which only removes tariffs and US corporations reduce labor cost by 80% in Mexico. Service sector is affected too, depresses earning in N. America. It also destroys Mexican enterprises. US exports its recession to Mexico as does Canada.
Luxury consumption-concentration of wealth 1.5% in a few hands, travel, leisure, auto, electronics, telecom, drive in and duty free culture. 85 % have only food and bare essentials (3). Provides breathing space to world economy.
Rentier Economy has developed in DC. Centered on service sector to siphon off the tribute of LDCs. Economy based on high tech know how, design and R&D. LDC pay royalties, license fee and to whole sellers and retailers of DC, all subordinate to MNC, non-material control of material sector.
LDC are not newly industrialized, they are simply zones of relocating and outsourcing.
DC Import Led Growth:
Dc appropriate earnings of direct producers, take advantage of cheap labor and GDP grows in DC.
Appropriation of Surplus by DC:
Imports are at very FOB, so recorded value in DC is low and are multiplied many times whole sale and retail. Market of DC. The difference between fob and retail is value added to GDP of DC. Coffee retails at 7-10 times of fob and 20 times the price paid to the farmer.(Jon E Dougherty: Brutal Chinese Working conditions Benefit Wal-Mart. World Net Daily.com 9/2000)
Retail salesmen in Dc make 40 times of workers in BD, but falling steadily in DC too (GM subsidiary Adelphi $28/hr to $8/hr). Not just light but heavy industry sector construction, Auto, Agri move to LDC.
Labor does not under NAFTA.
Non-material production Telecom, IT, finance, Banking, grow. Computer serves as a powerful instrument of corporate control.
Chap 8: Extending apartheid to Sub-Sahara
Under Mandela the right wing Afrikaner promote development of “food corridor” into neighboring countries (10.
ANC government anxious to facilitate expansion of Agri business into neighboring countries-Tanzania 12 other countries (6). They will expropriate peasant lands(8), supported by IMF/WB/WTO.

Chap 10 India under IMF
Union minister of finance reports directly 1818 H Street NW IMF office bypassing parliament and PM. Annual budget main clauses include WB/IMF loan agreements.
1991 bail out of N. Rao government was not quite the shock treatment given to Latin Americans and Eastern Europe. India escaped hyperinflation and collapse of foreign exchange market.. IMF program did not result in wide spread starvation and social destitution.
IMF came in after the fall of V.P. Singh govt in 1990 and assassination of Rajev in 1991. Govt airlifted 47 tons of gold to Bank of England at the demand of international creditors.(1). IMF and WB loan of $ 80.00 billion barely covered debt servicing for 6 months. 12/91 plan required cuts in social infrastructure and subsidy spending and sale of profitable state

Enterprises and close sick ones, liberalize trade, allow free entry of capital, pushed economy into stagflation, price of rice up by 50% balance of payment worsened due to import of luxury goods, domestic producers bankrupt due trade liberalization, and entry of free capital.
National renewal fund (NRF) of 7/91 did not provide compensation to public/private work (4-8 million laid off out of 26 million)?. Textile workers (1/30 auto engineering phased out. G7 wanted to capture domestic market, plus TRIPPS and abrogation of India’s 1970 patent laws, did not address mismanagement of public sector and bureaucracy. IMF agenda endorsed by the Indian businesses and landlord class. Tata and Birla identify with international finance. Preferential subsidies to credit to small/medium industry removed, monopoly promoted, profitable to subcontract with unorganized labor (2) and pay $ 1.00 a day against previously paid by BATA at $ 3.00/a day
Labor Laws scrapped, aimed at dis-empowering unions 70% households (rural) small farmers or landless laborers over 500 million employed 200 days a year, in irrigated and 100 days per year in rain fed areas.
Fertilizer subsidies removed, price up 40% in 1991reforms lower and scheduled caste completely ignored.(3) by finance minister later PM Man Mohan Singh.
Tamil Nadu govt paid farm workers $ 0.57 .00 a day, not enforced usually 1/3 of it. Heavy construction 40-57 cents for male and 30-40 for female/day
Starvation deaths rose sharply (7).
IMF recommended repeal of minimum wage and deindexation.(12).
Hindu and Muslim fundamentalists feed on poverty, program led to political fragmentation and secessionist movements.
Former IMF/WB employees have moved into key positions. Key policy documents directly drafted by IMF/WB (16-17-18).

Bangla Desh Chap 11

8/1975 coup Mujib assassinated assisted by BD security forces and CIA at the US embassy (1).
BD under constant supervision during Zia Rahman and Irshad regimes, 1975-81 and 1982-90. (3). IMF office on the 4th floor of central bank and WB adviser in most ministries.
An aid consortium formed, took control of public finances. IMF imposed elimination pf subsidies to Agriculture. US grain surplus dumped, food growth severely undermined.(8).
War of independence caused demise of industrial sector (9). Structural adjustment program gave lethal blow to it.
Aid money became a source of income to urban, professional, bureaucratic elite.
Social dimension per capita income in 1992 $ 170, annual per capita health expenditure $ 1.25, less than 25 c on medicines, rife under/mal-nourishment..
1991, 140,000 died in floods.

Chap 13 Brazil
6/1992 President Fernando color de Mello found to be personally involved in a multi-million dollar extortion racket-kickbacks for government contracts into phony bank accounts and personal expenses.
Simultaneously multi billion dollar deals between the finance minister and international creditors behind closed doors , while impeachment going on.. The minister resigned (1). Brady plan restructuring 44 billion dollars to international banks shortly before impeachment in 9/29/92, was a sell out. Impeachment was a distraction from social issues.
Devaluation caused inflation of 205. Raise of interest rate imposed in 1991 by IMF increased internal debt and attracted hot and dirty money.(3). Huge profits by 300 finance and industry empires (capital share of GDP up from 45% in 1980 to 66% in 1990?.
90 billion in debt interest paid in 198s (total debt 120 billion) Creditors wanted it to remain indebted forever. And grab national resources plus cheap labor economy.

Debt Saga:
Collar plan 1990 unusual combine of interventionist monitory policy, privatization, trade lib and floating exchange rate, $ 31.00 billion budget deficit to be eliminated. 360,000 federal employees fired, 20 ministries abolished (congress did not approve the lay offs, only 14,000 actually fired).
The f9inance minister froze savings accounts and killed economic activity.. Small business crippled and 200,000 laid off in 1990.
The previous president Sarnay had in 1989 imposed partial moratorium limiting debt service to 30% of total interest.. IMF held up 2 billion standby loan pending negotiations with banks (4). Brazil’s debt negotiator argued that payment be limited to Brazil’s ability to pay.
Citibank led group of 22 negotiators told banks not to give money to Brazil (6). Sanctioned by G7. US told WB and Inter American Development bank (IDB) to postpone payment to Brazil. IMF delegation did not go to Brazil. The finance minister accused IMF of using unfair tactics (7).
Finance minister Cardosa fired.. the new minister more compliant, was welcomed by IMF (8), had been an ambassador in the USA and had good terms with IMF.. the negotiator also dismissed by a WB executive director.
6/91 IMF sent a new mission. IMF demanded SAP with constitutional amendment implied. IMF man had to be replaced. (10). 1988 constitution required security of employment to federal civil servants as well as state, municipal programs from federal resources (12), as well as state pension plan and privatization of state enterprises also needed constitutional amendment.
Brazil caved in, second negotiation finalized late 1991.
Acting president Itamar Franco promised raise in wages, lowering of utility costs and change in privatizing program without realizing that IMF controlled all per agreement, only made creditors and national elite unhappy.. IMF forced three changes of finance ministers in 7/12 and sent auditors to monitor progress, quarterly targets for reducing budget deficit not met, disbursement stopped.
Michael Camdessus, IMF chief insisted on submission of a new economic program with in 60 days (17).
Fernando Henrique Carduso, Marxist sociologist appointed the fourth finance minister in 7/12 forgot all his ideology and supported neo-cons, rewarded with nomination as intellectual of the year. The president abdicated all the responsibility to the new minister.. 6/93 Carduso cut education, health and development budget by 50%, and advocated constitutional amendment.. Wages declined 31%, 11 billion given to creditors.(19).
4/94 restructuring 49 billion debt under Brady plan. Precise dates fixed for legislation including constitutional amendment. IMF given the task of monitoring on behalf of banks.
But deadline for signing the letter of intent could not be met, though the main condition to release massive amounts of funds for met. Social emergency fund created, budget cut 43%. Carduso became a presidential candidate.
Funds released by budget cuts transferred to SEF. Public employees laid off in huge numbers, pensions lost, salary ceiling imposed. The country lost sovereignty (21). Salaries deindexed (23) fed transfers to regional and municipal govt frozen (health, education and housing).
Carduso elected president 1994 after massive millions of dollar media campaign underwritten by businessmen who pledged no increase in price during the campaign.(24).
The policies led to further expulsion of landless peasants, a new class of urban poor created.
With funding in the hands of the elite, the media could not link poverty with IMF policies. Independent grass roots movements suppressed (29).

The Russian Federation:
A Russian economist “G7 wants to break high tech industries…IMF…weakens us” Stiglitz (1).
1992 shock treatment precluded development of national capitalism, controlled by Russian capitalists and supported by the Russian government. The West wanted to take over tech and science on the cheap and on the sly. It supported merchants and the mafia and killed national economy and drove state enterprise into bankruptcy. Blatant manipulation of market forces chose the sectors allowed to survive. 27% decline in production in the first year of reforms per official figures, in actual fact 50%.
IMF reforms that Yeltsin agreed to were a carbon copy of structural adjustment imposed on third world countries through Jeffery Sachs. Consumer prices rose 9,900% due to ant-inflationary program via dollarization of commodity prices and collapse of currency. Bread from 13-18 kopecks in 12/91 to 720 rubles in 10/92. (after reforms TV set from 800 to 8,500 rubles. Real earning declined 80% billions in life savings wiped out.(5).
Average earnings($ 10.00/month in 1992-93 minimum wage $ 3.00 (1992), university professor $ 8.00, office worker $ 7.00, Nurse $ 6.00/month, winter coat $ 60.00(11). They had more to eat during WW II.
State funded programs, schools, hospitals, KG, sports, culture, art told to become self financing with user fee. Surgery cost 2-6/ months earnings. Theatres collapsed (13).
A careful mix of Stalinese and free market maintained. Russian govt issued dishonest reports that standard of living had gone up. (14) .People did not believe in govt reports. (17).
During Perestroika buy at state regulated price, sell at free market plus corruption. Source of wealth (18) law of cooperatives 1988. private corporation allowed along side state corporations in many cases set up by state operatives. 1989 cooperatives allowed own banks and foreign transactions, created bourgeoisie rather than capitalist.
In the soviet Union primitive accumulation was theft from the state. Apparatchik capitalism (19). New merchant class supported IMF reforms. Currency went down “people willing to buy dollars at any price (200. Reforms were used to neutralize a former enemy and prevent its development into a capitalist power. Economic activity criminalized. State property looted, money laundered and capital flew out. Privatization transferred state property to organized crime. By 1993 half Russian banks under local mafia as well as half of control over real estate.(21).
National resources oil, metals and other raw material bought in rubles and sold in hard currency. Oil bought at 5200 rubles=$ 7.00, license obtained by bribe, sold at $50.00(22) and deposited off shore or luxury imports. Deregulation of foreign exchange meant capital flight 1 billion/month. (23) with a large share for the political establishment.
IMF reforms promote export of raw material, luxury goods import, and no protection for domestic industry.
Steep rise in poverty does not support international market. Under the Soviet system basic necessities provided, long lines for luxury goods. Now no food, luxury items for a few, US made Russian Vodka at $345.00 in a crystal bottle and cars.
State assets could be bought for little at book value kept low and ruble worthless (24).
Rocket production unit for 1 million, Downtown Moscow Hotel for less than a Paris apartment. 1992 Moscow apartment on auction price started at 3 rubles! Comprador elite have no management skills, thrive on contacts with foreign capital as in third world countries.
Large section of national economy taken over by foreign capital through joint ventures. American Marlboro, Philip Morris control production of tobacco. British Air has access to domestic routes.
High tech military industry taken over by joint ventures. Others closed down.
Western Aerospace industry eyes on local industry. Top Russian scientist-fiber optics, computers, satellite, nuclear physics on sale for $ 100.00/month. (in silicon valley $ 5,000.000 at the time). 1.5 million scientists unemployed (26).
Military Industrial complex being dismantled under NATO., taken over knowledge base (intellectual property rights-27. Military hardware sold as scrap.
State banks collapsed, private ones with international links opening up.
Ruble zone abolished, trade between former republics undermined, economic Balkanization and bitter disputes between Russia and Ukraine. (28).
Opposition to IMF built up late 1992. Central bank president Greshenko defied IMF to expand credit to state enterprises, cut expenses on education, health and pension for old.
Early 1993 government and parliament confrontation and latter passed legislation to slow down privatization, put restrictions on foreign banks and curbed government slashing of subsidies against IMF wish (29). Parliament favored national capitalism with a strong role for the state. Yeltsin suspended both houses on 9/21/1993.
9/23/1993 Camdessus 3 billion installment of loan not coming, conditions not met. Clinton had linked aid to democracy. IMF wanted parliament suspension. Parliament stormed by troops and artillery.
G7 had endorsed Yeltsin abolishing both houses. Abolition soon followed by enhanced speed of decrees for “reform” credit tight, interest up. Privatization accelerated, trade liberalization increased (30). Large sectors of industry pushed into bankruptcy.. second wave of impoverishment on top of the first one. (34). Money diverted to the West creditors. 1993 coup followed by cutting funds to regions and municipalities.
By 1993 significant outflow of resources, balance of payment deficit US 40.00 billion (aid 43.00 billion) Loan only increased debt. (80.00 billion in 1993. Out of 43.4 billion pledged less than 3 billion disbursed. Rescheduling only for debt during Soviet era.
Bilateral pledge Clinton 1.6 billion in Vancouver summit 1993, 970 million for food from US, 630 million was for arrears on food for progress program) PL 480 of third world countries). Japanese aid for insuring Japanese companies operation in Russia (37).
After the coup no write off or write down of debt requested by Russia. 10/1993 Frankfurt meeting of the London club 24 of 38 billion debt rescheduled. Russian accepted all conditions except to waive legal sovereign immunity to legal action that would have enable creditors to impound Russian state enterprises and seize assets. Russia was being pushed into de-facto default. They also wanted to use Russia’s foreign exchange reserves into debt servicing and looking for off shore accounts of Russians.
Russian civil society, political parties subservient to the mercantile class and bureaucrats. More than 50% industrial plants bankrupted by 1993 (38). Entire cities in Urals and Siberia dependent upon military industrial complex closed down. 1994 per official figures workers at 33,000 enterprises were not being paid regularly.

Chap 19 Developed countries.
Factories closing down, agricultural farmer facing bankruptcy, corporate restructuring of aerospace and engineering industry, auto production to East Europe and Asia, backlashes on service industry, collapse of airlines, retail companies, real estate empires plunge, property values crash, Thatcher-Reagan time wave of bankruptcies, mergers, black Monday 10/19/1987, stock market crash (2008 worse).
At the very heart of crises are public debt markets, trillions of dollars in government bonds bought and sold daily. Public debt allows financiers/bankers to control governments. IFI surveillance imposed routinely on Europe and North America.
Dc governments third world-ized, finance ministers report to IFIs , welfare state phased out. Government and Para-state-municipal- debts categorized by Moody’s and Standard and Poor’s ratings. 1996 Moody downgraded Sweden government debt forcing the government to downgrade social welfare(1).Similar was the fate of Canada-lay offs and closure of provincial hospitals. Entire Canadian National Railway sold off to international capital market for 2 billion less than demanded by the Canadian Labatt brewery(2).Attempt to privatize health and education. WTO wants cultural activities to be made into moneymaking operations.
Since 1980s large debts of corporations and banks transformed into public debt-central feature of crisis management ( US 1 trillion in 2008 and going up, state takes over bankrupt enterprises. Non-performing loans of commercial banks transformed into pre-tax losses.
State subsidies instead of being used for job stimulation, finance mergers, buy tech and outsourcing.
Regressive tax system had enlarged public debt. Low and middle class salariat tax recycled to service public debt in a tribute from the poor to the rich.
Capital had, thanks to electronic tech, flown off shore, Bahamas, Switzerland, Cayman Islands-the last a British Crown colony, fifth largest banking center in the world (4), partly controlled by criminals.
The state has ended up financing its own indebtedness by subsidies financed and banking houses.

Central banks independent-in most OECD countries made independent of political influence making national treasury at the mercy of private capital.
Under article 104 of Maastricht treaty “central bank credit to the government is entirely discretionary…can not be forced to provide credit (6).
Central banks operate as autonomous bureaucracy under the supervision of private interests. In the US Fed is dominated by a few private banks which are shareholders of the 12 fed reserve banks.. In the EU, the European central bank based in Frankfurt is dominated by German banking. Giants, the Deiutche and Dresden (lately merged) together with a few other European banks and IFI.
Monitory policy no longer an instrument of state intervention, belongs to private banking, creation of money occurs with in international banking system (command of real sources) with ability to move it, manipulate interest rate, cause decline of currency as the drastic fall of pound showed in 1992.
Neo-liberals and the state:
Elected officials act as puppets of IFI. A consensus on macro-economic reform pervades the entire political spectrum-reduce deficit and inflation, put brakes on economy.
Demo and Republican in the US and Socialist and Greens, Social Democrats, New Labor, old former communists more effective as loyal servants of IFI, because of their progressive rhetoric and links with organizations, in cutting back welfare. Revolving door especially in the US-Robert Rubin (Goldman Sachs, W.B president Lewis Preston (J.P.Morgan), Poulson (Goldman…), Robert McNamara (Ford, Defense WB), WTO head Peter Sutherland into Goldman…Nicholas Brady republican senator to treasury secretary-off shore banking (7). System riddled with conflicts of interest.

Chap 20 Meltdown
Bretton Woods fixed exchange rate collapsed in 1971. Debt crisis of 1980s led to mergers, buyouts, and bankruptcies paving the way to consolidation and coalescing interest of financiers , commercial banks, insurance companies, stock brokerage firms and institutional investors around the world (1).
Money managers powerful but removed from real economy. They speculate in commodity and commodity futures, derivatives and manipulate currency markets, money launderers, off shore banking transfer of funds-electronic legal and illegal transactions mixed up and with deregulation criminals have got into the act in a big way.
10/19/1987 Wall street crash overshadowing that of 10/28/1929, lost 22.6 % of value (10/28/1929 12.8%, 10/29/1929 11.7%) during the first hours of leading to the tumble of European and Asian markets. In its wake massive concentration of financial power, and institutional speculators emerged who can drive large corporations to bankruptcy..
1993 Bundesbank warned that its derivatives could cause “trigger reaction…endanger financial system …”(3). Greenspan committed to deregulation warned “ legislation not enough to prevent a repeat of Bering crisis…high tech transactions…push of a button (4-5). They were the source of unprecedented wealth. ?
1995 daily FC exchange transaction $ 1.3 trillion exceeded world’s official F E reserve. 1.2 trillion, institutional speculators commanded capital in excess of that central banks did.
Ten years after 10/87 on 10/1997 Dow Jones fell by 7.2%. All major exchanges linked around the clock with internet.. All slumped. Absence of state regulation heightened the disarray, 1987 Wall street had advised US treasury not to meddle.
In 10/271977 a circuit breaker halted for 30minutes after 350 plunge in Dow Jones, next 25 minutes 200 points and circuit halted.
Wall street replicated 1929 volatility before the crash and similar complacency followed as after 1929 crash upholding declaration and Nobel prize awarded in 1997 to two deregulator Us economists.
In 1987 currencies remained stable. 1997 stock market and currencies both deliberately undermined by currency speculators in Thailand, Indonesia, Malaysia and Philippines, drove billions from central banks to private hands (8) and the same IFI offered to rescue but the loans were re-appropriated by speculators soon enough.
Economists had deemed economic fundamentals to be strong ( McCain 9/2008), 1029/97 plunge blamed on erstwhile Asian tigers, since called lame ducks. Greenspan was reassuring, Wall street woes called catching Hong Kong flu.
8/98 ruble nose-dived. Dow Jones lost 554 points, second largest till then, in a few weeks 2.3 trillion paper profits wiped out. Moscow banks went bankrupt, default threat, 500 billion in assets lost through privatization and bankruptcy into IFI capitalist pockets.
In spite of the crisis deregulation continued . 11/99 financial modernization (1/52 before Millennium summit of WTO in Seattle). Sweeping deregulation of US banking and financial institutions-banks, hedge funds, institutional investors, pension funds, insurance co-the whole lot could invest in each other and integrate financial operations and repealed Glass-Steagall act of 1933 separating securities underwriting from lending put in place by FDR to control corruption, manipulation and insider trading which had led to 5,000 bank failures following the 1929 crash (9).
Entire control of US financial services handed over to financial conglomerates-Global financial supermarket to be overseen by Wall street. Legislation entitled banks to set interest rates bypassing the Fed.
Mergers: American finance intent on dwarfing West Europe and Japanese financial services and selling alliance with German and British banks.
Several mergers rubber stamped by the Fed even before the 1999 act (National Bank with Bank of America, Citibank with Travelers which owns Solomon, Smith, Barney in a 72 billion merger in 1998 (10), Deutsche with bankers Trust, Credit Suisse with First Boston, HSBC with Wells Fargo and Wachovia with Republic NY bank-9 billion.
1999 act in fact empowers Wall Street giants (11) Merrill Lynch, Citogroup, Lehman Bros, JP Morgan to acquire global financial hegemony.
WTO General Agreement on trade in Services (GATS) and financial services (FAT) allow IFI to go where they want bankrupting national financial institutions they have infiltrated into. LDCs granted them national status. They operate under domestic laws which are being changed per IMF/WB orders. Citigroup acquired 106 branches of Banco Mayo cooperative Ltda and became Argentina’s second largest bank. Do not even need formal adoption of GATS by governments.

Chap 21 Economic Warfare
IMF abetted speculators into deepening the Asian crisis with a push for deregulation of capitol flows. The scramble to accumulate wealth through financial manipulation was behind the crisis. Control of natural assets, labor, production and institutions no longer requires colonization or armed force, only army on stand by or naked aggression as an example Iraq-Afghan and incursions into Pakistan). Relevant data instantly relayed for disruption of national economies through speculative investments.
PM Mahatir Muhammad of Malaysia “…deliberate devaluation of the currency…by currency traders…denial of…rights of independent nations” (1).
Acquisition of wealth via marked manipulation supported by IMF intervention. This warfare recognized no national boundaries central banks pillaged in SK, Thailand and Indonesia as well as in USSR, East European countries in 1997, over 100 billion hard currency of Asia confiscated in a few months into private hands. Vulture capitalists destabilized their captured Asian assets. Thailand unemployment doubled over night (3).
Central Banking declines. They can not compete with institutional speculators. Pillage hit Canada and Australia too. 1998 Canada borrowed billions from private financiers. Korean scenario was meant to be repeated in Japan (4). Bad Japanese banks bought at 10% of value (5).
Largest banks and brokerage houses are both creditors and speculators. They boosted dollar debts and destabilized currencies in the wake of Asian crisis, appeared as creditors to collect debts they had helped create, called in advisers from WB bankruptcy program and helped them as well. In Indonesia while people rioted in streets key sector privatization ordered by IMF to merchant banks. Lehman, Credit Suisse, First Boston, Goldman Sachs, etc(6). They set fire and called in IMF as firemen., decided what had to be auctioned and what closed.
1997 Asian Banks forced due to depletion of hard currency, to borrow under IMF bail out. The money never entered countries, went to reimburse speculators. Money in small amount from IMF-G7 contributed heavily, increasing their public debt (7), underwritten by the same Wall street firms, they would appropriate the loot.
Economic Medicine
Global money managers crave information on which to base speculative raids. Big Wall Street commercial banks are consulted on the clauses of bail out agreement. They want national currencies to collapse. Prior to Asian crisis the Institute of International Finance (I I F) representing 300 International Banks and brokerage houses “urged authorities…to curb upward exchange rate pressures” (9). Indonesia had been ordered three months before the dramatic fall of Rupiah to unpeg its currency.(10).
Global banks with MNCs have demanded deregulation of movement of capital including hot and dirty one (11).Caving in to the formal verdict of IMF to do so in 1998 (12) Michel Camdissus conceded that “…developing countries may come under speculative attacks (13).
The market conservatives in the US demanded more control over IMF and that multi-billion dollar rescue be consigned to private sector (14).
The private sector has demanded a “private sector” Advisory council to “oversee IMF” (15).
Amount of wealth concentrated largely through speculative means (17) into off shore banks reducing tax revenues and enhancing public debt.
Earnings of direct producers is reduced, poverty increased and social progress cut back